Suraj R. Agrawal

Under section 9(1)(v), interest income is deemed to accrue or arise in India in the following circumstances: (a) Interest payable by the Government; or (b) Interest payable by a resident except: (i) interest payable by a resident, in respect of a any money borrowed and used for the purpose of business or profession carried on by such person outside India or (ii) interest payable by a resident in respect of any debt incurred or any money borrowed and used for the purpose of making or earning any income from any source outside India. It may be noted that where money borrowed by a resident for the purpose of a business or profession carried on by him outside India are actually used for any other purpose, interest payable thereon will be deemed to accrue or arise in India. (Refer circular no. 202 of July 5, 1976) Similarly, interest payable on money borrowed by a resident for the purpose of making or earning any income from any source outside India will be deemed to accrue or arise in Indi...

Section 44B provides that profits or gains of a non-resident from the business of operation of ships are to be taken @ 7.5% of the aggregate of the following amounts: (a) paid or payable, whether in or out of India, to the assessee or to any person on his behalf on account of carriage of passengers, livestock, mail or goods shipped at any port in India. (b) received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock mail or goods shipped at any port outside India. Explanation to Section 44B provides that the amounts referred to above will also include the amount paid or payable or received or deemed to be received by way of demurrage charges or handling charges or any other amount of similar nature. Important Judicial Precedents & Board Circulars: 1. The amounts paid or payable or the amounts received or deemed to be received will also include the amount paid or payable or received or deemed to be received by way of...